Noble

Noble: StanChart upgraded Noble Group to OUTPERFORM with a higher TP of $1.28 (from $1.02), representing an upside of 19%. Taking a cue on the valuation of 1.4x P/B from Temasek’s offer for Olam, House TP for Noble equates to a 1.3x P/B. StanChart expects sugar to underpin an earnings recovery or even a re-rating, given a combination of maturing assets and higher prices. In addition, should the current discussions relating to a sale of its agri business with COFCO lead to a deal, it may unlock value and shift sentiment. CEO Yusuf Alireza continues to focus on positioning Noble towards its core supply-chain manager skills, with an asset-light structure. We view investments in X2 and Resource Generation as on-strategy and value- and reputation accretive. Moreover, management has a mantra that ROE is “the ultimate goal”, but “not with a weak investment grade”.